It’s not looking good for Asia’s retirees, according to HSBC. They face eight years of hardship after their savings run out, according to the bank’s Future of Retirement Survey 2013. And many oldies expect to fund their twilight years with savings, the bank finds. Now banks really hate that. No chargeable fees there.
And property cost is the most important life event affecting saving ability, they discover. No surprises there. And then the amazing revelation that over 60% of respondents who took professional financial advice saved more. More than what?
But apart from the clear inference that people who take professional advice do better than those listening to their own advice – this report is interesting. Alarmingly, Asians expect their retirement savings to last only 10 years, and run out about halfway through their expected 18 years of retirement.
The 15,000 surveyed people in 15 markets worldwide included Australia, China, Hong Kong, India, Malaysia, Singapore and Taiwan. The savings may be eaten up by life events and inflation and everything costs more than you expect is hardly news, but the interesting part is how much people think they need versus the real cost of living.
Asian respondents estimate they need nearly US$40,000 (HK$310,000) per year for a comfortable retirement, slightly higher than the global average of around US$35,000 (HK$270,000). The proportion of “working age” income required for retirement varies in Asia compared to the global average of 78%, 98% in India, 83% in Taiwan and Hong Kong, 81% in Malaysia, 75% in China, and 66% in Australia and Singapore.
Actually lots of people don’t intend to retire at all. ”Continuing to work to some extent” is among the top three aspirations cited by Indian and Singaporean respondents. Louisa Cheang, Group General Manager, Regional Head of Retail Banking and Wealth Management, Asia-Pacific, HSBC, said: “The survey shows….a clear gap between how much people are saving and how much they require maintaining their living standards in retirement. Shifting economic and social trends requires people to think differently about retirement and prepare for the unexpected.”
The amount needed in each country varies hugely. The survey finds household income required to lead a comfortable retirement per year: Australia AUD58,000 (HK$469,000) China RMB166,100 (HK$205,000) Malaysia MYR76,900 (HK$192,379) Hong Kong HKD436,000, India INR1,116,200 (HK$162,700) Singapore SGD60,400 (HK$378,199) Taiwan TWD1,068,600 (HK$280,085).
